Section 12: General reserve fund

(1) The Mortgage Bank shall establish a general reserve fund to which shall be allocated from the net profits of the Mortgage Bank at the end of each financial year of the Mortgage Bank-
(a) 50% of the net profits of the Mortgage Bank for the year, when at the end of the year the fund is less than the authorised capital of the Mortgage Bank;
(b) 25% of the profits of the Mortgage Bank for the year, when the fund is equal to or exceeds the authorised capital of the Mortgage Bank.
(2) After any allocation has been made in terms of subsection (1) of this section, the balance of the net profits shall be applied to the retirement of any loan granted to the Mortgage Bank by the Federal Government or any other body.
(3) The remainder of the net profits, if any, shall be paid to the shareholders.